Amount of Compensation for Household Consumers of Electric Energy in the Case of Renewable Energy Sources Promotion

Abstract

The promotion of the scenario which fully covers the electricity demand from renewable sources leads to an electricity price increase, mostly impacting poor population from the Republic Moldova. In order to decrease the Absolute Poverty Rate, the paper proposes a way to determine the appropriate allowances. Achieving the objective is hampered by the fact that the existing Methodology for calculating the Absolute Poverty Threshold does not expressly contain the component related to the expenses for the electricity services provided. Such an algorithm is proposed in this regard using the structure of household consumption by categories of consumption, available at distribution companies. The calculations showed that the promotion of the concept of covering the power demand from renewable sources does not significantly harm the payment capacity of household consumers, in terms of the 2020-2021 years costs.